HORIZON BANCORP INC /IN/ 10-Q

ITEM 1 – FINANCIAL STATEMENTS HORIZON BANCORP, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Dollar Amounts in Thousands) September 30, 2025 December 31, 2024 Assets Cash and due from banks $ 76,395 $ 92,300 Interest-bearing deposits in banks 381,860 201,131 Total cash and cash equivalents 458,255 293,431 Interest earning time deposits — 735 Investment securities, held for trading 598 — Investment securities, available for sale 883,242 233,677 Investment securities, held to maturity (fair value of $ 0 and $ 1,566,268 ) — 1,867,690 Loans held for sale 1,921 67,597 Loans, net of allowance for credit losses of $ 50,178 and $ 51,980 4,773,491 4,795,060 Premises and equipment, net 93,413 93,864 Federal Home Loan Bank stock 45,713 53,826 Goodwill 155,211 155,211 Other intangible assets 7,886 10,223 Interest receivable 28,758 39,747 Cash value of life insurance 37,762 37,450 Other assets 226,247 152,635 Total assets $ 6,712,497 $ 7,801,146 Liabilities Deposits Non-interest bearing $ 1,122,888 $ 1,064,818 Interest bearing 4,398,013 4,535,834 Total deposits 5,520,901 5,600,652 Short and long term borrowings 247,172 1,232,252 Subordinated notes 154,011 55,738 Junior subordinated debentures issued to capital trusts 57,636 57,477 Interest payable 12,395 11,137 Other liabilities 59,611 80,308 Total liabilities 6,051,726 7,037,564 Commitments and contingent liabilities Stockholders’ Equity Preferred stock, Authorized, 1,000,000 shares, Issued 0 shares — — Common stock, no par value, Authorized 99,000,000 shares — — 51,217,433 and 44,226,819 shares issued at September 30, 2025 and December 31, 2024, respectively Additional paid-in capital 458,734 363,761 Retained earnings 236,312 436,122 Accumulated other comprehensive income (loss) ( 34,275 ) ( 36,301 ) Total stockholders’ equity 660,771 763,582 Total liabilities and stockholders’ equity $ 6,712,497 $ 7,801,146 See accompanying Notes to Condensed Consolidated Financial Statements 3 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (Unaudited) (Dollar Amounts in Thousands, Except Per Share Data) Three Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Interest Income Interest and fees on loans $ 79,561 $ 75,488 232,637 214,322 Investment securities - taxable 6,631 8,133 18,611 23,481 Investment securities - tax exempt 4,581 6,310 16,861 19,138 Other 2,063 957 5,380 6,192 Total interest income 92,836 90,888 273,489 263,133 Interest Expense Deposits 25,726 30,787 77,379 87,224 Short and long term borrowings 5,924 11,131 23,283 34,274 Subordinated notes 1,731 830 3,389 2,490 Junior subordinated debentures issued to capital trusts 1,069 1,230 3,429 3,668 Total interest expense 34,450 43,978 107,480 127,656 Net Interest Income 58,386 46,910 166,009 135,477 Credit loss (benefit) expense ( 3,572 ) 1,044 266 4,218 Net Interest Income after Provision for Credit Losses 61,958 45,866 165,743 131,259 Non-interest (Loss) Income Service charges on deposit accounts 3,474 3,320 9,890 9,664 Wire transfer fees 71 123 211 337 Interchange fees 3,510 3,511 10,154 10,446 Fiduciary activities 1,363 1,394 3,940 4,081 Loss on sale of investment securities ( 299,132 ) — ( 299,538 ) — Gain on sale of mortgage loans 1,208 1,622 3,503 3,144 Mortgage servicing income net of impairment 351 412 1,111 1,301 Increase in cash value of bank owned life insurance 379 349 1,060 965 Other income (loss) ( 6,558 ) 780 1,756 1,987 Total non-interest (loss) income ( 295,334 ) 11,511 ( 267,913 ) 31,925 Non-interest Expense Salaries and employee benefits 22,698 21,829 67,843 62,680 Net occupancy expenses 3,321 3,207 10,149 9,945 Data processing 2,933 2,977 8,757 8,020 Professional fees 808 676 2,369 1,997 Outside services and consultants 3,844 3,677 10,387 10,094 Loan expense 1,237 1,034 3,157 2,791 FDIC insurance expense 1,345 1,204 3,849 3,839 Core deposit intangible amortization 706 844 2,338 2,560 Merger related expense — — 305 — Prepayment penalties 12,680 — 12,680 — Other losses 131 297 605 828 Other expense 3,249 3,527 9,239 11,147 Total non-interest expense 52,952 39,272 131,678 113,901 Income Before Income Taxes ( 286,328 ) 18,105 ( 233,848 ) 49,283 Income tax expense (benefit) ( 64,338 ) ( 75 ) ( 56,444 ) 2,972 Net Income (Loss) Available to Common Shareholders $ ( 221,990 ) $ 18,180 $ ( 177,404 ) $ 46,311 Basic Earnings Per Share $ ( 4.69 ) $ 0.42 $ ( 3.94 ) $ 1.06 Diluted Earnings Per Share $ ( 4.69 ) $ 0.41 $ ( 3.94 ) $ 1.05 See accompanying Notes to Condensed Consolidated Financial Statement 4 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Dollar Amounts in Thousands) Three Month Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Net Income (loss) $ ( 221,990 ) $ 18,180 $ ( 177,404 ) $ 46,311 Other Comprehensive Income (Loss) Change in securities: Unrealized gain (loss) for the period on AFS securities ( 294,472 ) 20,800 ( 294,433 ) 11,791 Amortization from transfer of securities from available for sale to held to maturity securities ( 1,820 ) ( 162 ) ( 2,395 ) ( 490 ) Reclassification adjustment for securities (gains) losses realized in income 299,132 — 299,538 — Income tax effect ( 712 ) ( 4,334 ) ( 684 ) ( 2,373 ) Unrealized gains (losses) on securities 2,128 16,304 2,026 8,928 Other Comprehensive Income (Loss), Net of Tax 2,128 16,304 2,026 8,928 Comprehensive Income (Loss) $ ( 219,862 ) $ 34,484 $ ( 175,378 ) $ 55,239 See accompanying Notes to Condensed Consolidated Financial Statements 5 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) (Dollar Amounts in Thousands, Except Per Share Data) Three Months Ended Three Months Ended Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Balances, July 1, 2024 $ — $ — $ 357,673 $ 442,977 $ ( 73,985 ) $ 726,665 Net income — — — 18,180 — 18,180 Other comprehensive income, net of tax — — — — 16,304 16,304 Amortization of unearned compensation — — 853 — — 853 Net settlement of share awards — — ( 73 ) — — ( 73 ) Cash dividends on common stock ($ 0.16 per share) — — — ( 7,107 ) — ( 7,107 ) Balances, September 30, 2024 $ — $ — $ 358,453 $ 454,050 $ ( 57,681 ) $ 754,822 Balances, July 1, 2025 — — 360,759 466,496 ( 36,403 ) 790,852 Net loss — — — ( 221,990 ) — ( 221,990 ) Other comprehensive income, net of tax — — — — 2,128 2,128 Amortization of unearned compensation — — 317 — — 317 Net settlement of share awards — — ( 292 ) — — ( 292 ) Issuance of common stock ( 7,138,050 shares), net of expenses — — 97,950 — — 97,950 Cash dividends on common stock ($ 0.16 per share) — — — ( 8,194 ) — ( 8,194 ) Balances, September 30, 2025 $ — $ — $ 458,734 $ 236,312 $ ( 34,275 ) $ 660,771 See accompanying Notes to Condensed Consolidated Financial Statements 6 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) (Dollar Amounts in Thousands, Except Per Share Data) Nine Months Ended Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Balances, January 1, 2024 — — 356,400 429,021 ( 66,609 ) 718,812 Net income — — — 46,311 — 46,311 Other comprehensive income, net of tax — — — — 8,928 8,928 Amortization of unearned compensation — — 2,893 — — 2,893 Net settlement of share awards — — ( 840 ) — — ( 840 ) Cash dividends on common stock ($ 0.48 per share) — — — ( 21,282 ) — ( 21,282 ) Balances, September 30, 2024 $ — $ — $ 358,453 $ 454,050 $ ( 57,681 ) $ 754,822 Balances, January 1, 2025 — — 363,761 436,122 ( 36,301 ) 763,582 Net loss — — — ( 177,404 ) — ( 177,404 ) Other comprehensive income, net of tax — — — — 2,026 2,026 Amortization of unearned compensation — — 1,164 — — 1,164 Net settlement of share awards — — ( 4,141 ) — — ( 4,141 ) Issuance of common stock ( 7,138,050 shares), net of expenses — — 97,950 — — 97,950 Cash dividends on common stock ($ 0.48 per share) — — — ( 22,406 ) — ( 22,406 ) Balances, September 30, 2025 $ — $ — $ 458,734 $ 236,312 $ ( 34,275 ) $ 660,771 7 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (Dollar Amounts in Thousands) Nine Months Ended September 30, 2025 September 30, 2024 Operating Activities Net income (loss) $ ( 177,404 ) $ 46,311 Items not requiring (providing) cash Provision for credit losses 266 4,218 Depreciation and amortization 9,645 7,684 Share based compensation 1,164 2,893 Amortization of mortgage servicing rights 1,555 1,435 Net (accretion) amortization of premiums and discounts on securities ( 1,177 ) 6,496 Purchases of securities held for trading ( 598 ) — Loss on sale of investment securities 299,538 — Gain on sale of mortgage loans ( 3,503 ) ( 3,144 ) Loss on sale of portfolio loans 324 — Proceeds from sales of loans 114,280 91,515 Loans originated for sale ( 114,614 ) ( 89,978 ) Gain on cash value life insurance ( 1,060 ) ( 965 ) Gain on other real estate owned ( 77 ) ( 74 ) Net change in: Interest receivable 10,989 ( 656 ) Interest payable 1,258 ( 10,849 ) Other assets ( 72,995 ) 12,677 Other liabilities ( 21,933 ) ( 12,822 ) Net cash provided by operating activities $ 45,658 $ 54,741 Investing Activities Purchases of securities available for sale ( 583,455 ) — Proceeds from sales of securities available for sale 1,409,870 — Proceeds from maturities, calls and principal repayments of securities available for sale 32,284 14,721 Purchases of securities held to maturity — ( 312 ) Proceeds from maturities of securities held to maturity 63,783 52,586 Net change in interest-earning time deposits 735 1,470 Purchase of FHLB stock ( 301 ) ( 19,317 ) Redemption of FHLB stock 8,414 — Purchase of loans — ( 240,020 ) Proceeds from sale of portfolio loans 228,892 — Net change in loans ( 131,826 ) ( 173,382 ) Proceeds on the sale of OREO and repossessed assets 623 1,067 Premises and equipment expenditures ( 4,013 ) ( 3,286 ) Proceeds from bank owned life insurance 748 44,043 Net cash provided by (used in) investing activities $ 1,025,754 $ ( 322,430 ) Financing Activities Net change in deposits ( 79,751 ) 62,122 Proceeds from borrowings 139,943 512,759 Repayment of borrowings ( 1,132,135 ) ( 563,120 ) Net change in repurchase agreements ( 2,944 ) ( 13,631 ) Proceeds from issuance of subordinated notes 95,784 — Net settlement of share awards ( 4,141 ) ( 840 ) Proceeds from issuance of common stock 97,950 — Dividends paid on common stock ( 21,293 ) ( 21,282 ) Net cash used in financing activities $ ( 906,588 ) $ ( 23,992 ) Net Change in Cash and Cash Equivalents $ 164,824 $ ( 291,681 ) Cash and Cash Equivalents, Beginning of Period $ 293,431 $ 526,515 Cash and Cash Equivalents, End of Period $ 458,255 $ 234,834 Additional Supplemental Information Interest paid $ 106,222 $ 138,505 8 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Unaudited) (Dollar Amounts in Thousands) Income taxes paid 20,347 9,505 Transfer of loans to other real estate and repossessed assets 2,623 1,845 Transfer of held to maturity securities to available for sale 1,798,361 — Transfer of LHI to HFS 191,485 — Cash dividends declared, not paid 8,194 — See accompanying Notes to Condensed Consolidated Financial Statements 9 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Note 1 - Accounting Policies Nature of Business and Basis of Reporting The accompanying unaudited condensed consolidated financial statements include the accounts of Horizon Bancorp, Inc. (“Horizon” or the “Company”) and its wholly-owned subsidiaries, including Horizon Bank (“Horizon Bank” or the “Bank”), which is an Indiana commercial bank. All inter–company balances and transactions have been eliminated. The results of operations for the periods ended September 30, 2025 and September 30, 2024 are not necessarily indicative of the operating results for the full year of 2025 or 2024. The accompanying unaudited condensed consolidated financial statements reflect all adjustments that are, in the opinion of Horizon’s management, necessary to fairly present the financial position, results of operations and cash flows of Horizon for the periods presented. Those adjustments consist only of normal recurring adjustments. Certain information and note disclosures normally included in Horizon’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in Horizon’s Annual Report on Form 10–K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission on March 14, 2025 (the “2024 Annual Report on Form 10–K”). The condensed consolidated balance sheet of Horizon as of December 31, 2024 has been derived from the audited balance sheet as of that date. Horizon Bancorp has one reportable segment. Business activities are managed on a consolidated basis and revenues are derived primarily through commercial banking, offering retail banking and private wealth management from North America. Horizon Bancorp’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM assesses performance and allocates resources based on consolidated net income, as reported on the Consolidated Statement of Income , and the same accounting policies are applied as described in the Note 1 - Nature of Operations and Su mmary of Significant Accounting Policies included in Horizon’s 2024 Annual Report on Form 10–K. The CODM uses net income to evaluate income generated from segment assets in deciding whether to reinvest profits into the business or distribute dividends to shareholders. The CODM also uses net income in competitive analysis by benchmarking against Horizon Bancorp’s competitors. The competitive analysis, along with the monitoring of budgeted versus actual results, is used in assessing performance of the segment and in establishing management’s compensation On July 16, 2019, the Board of Directors of the Company authorized a stock repurchase program for up to 2,250,000 shares of Horizon’s issued and outstanding common stock, no par value. As of September 30, 2025 , Horizon had repurchased a total of 803,349 shares at an average price per share of $ 16.89 . Basic earnings per share is computed by dividing net income available to common shareholders (net income less dividend requirements for preferred stock and accretion of preferred stock discount) by the weighted–average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. 10 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following table shows computation of basic and diluted earnings per share. Three Months Ended Nine Months Ended (dollar amounts in thousands, except per share) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Basic earnings per share Net income (loss) $ ( 221,990 ) $ 18,180 $ ( 177,404 ) $ 46,311 Weighted average common shares outstanding 47,311,642 43,712,059 44,974,027 43,695,968 Basic earnings per share $ ( 4.69 ) $ 0.42 $ ( 3.94 ) $ 1.06 Diluted earnings per share Net income available to common shareholders ( 221,989 ) 18,180 ( 177,404 ) 46,311 Weighted average common shares outstanding 47,311,642 43,712,059 44,974,027 43,695,968 Effect of dilutive securities: Restricted stock — 394,939 — 392,976 Stock options — 5,323 — 4,551 Weighted average common shares outstanding 47,311,642 44,112,321 44,974,027 44,093,495 Diluted Earnings per Share $ ( 4.69 ) $ 0.41 $ ( 3.94 ) $ 1.05 Due to the net loss for the three and nine months ended September 30, 2025, all potential common shares are non-dilutive and are therefore excluded from diluted earnings per share. There were 87,012 and 87,012 shares for the three and nine months ended September 30, 2024 which were not included in the computation of diluted earnings per share because they were non–dilutive. 11 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Note 2 – Securities The fair value of available-for-sale securities is as follows. September 30, 2025 Amortized Cost Allowance for Credit Losses Net Carrying Amount Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale U.S. Treasury, federal agencies, and government sponsored agencies $ 31,836 — $ 31,836 $ 58 $ ( 58 ) $ 31,836 State and municipal 354,290 — 354,290 1,753 ( 40,715 ) 315,328 U.S. government agency mortgage-backed securities 491,207 — 491,207 3,175 ( 480 ) 493,902 Corporate notes 48,750 ( 150 ) 48,600 — ( 6,424 ) 42,176 Total available for sale investment securities $ 926,083 $ ( 150 ) $ 925,933 $ 4,986 $ ( 47,677 ) $ 883,242 September 30, 2025 Amortized Cost Allowance for Credit Losses Net Carrying Amount Gross Unrealized Gains Gross Unrealized Losses Fair Value Held to maturity U.S. Treasury, federal agencies, and government sponsored agencies $ — $ — $ — $ — $ — $ — State and municipal — — — — — — U.S. government agency mortgage-backed securities — — — — — — Private labeled mortgage–backed pools — — — — — — Corporate notes — — — — — — Total held to maturity investment securities $ — $ — $ — $ — $ — $ — In August 2025, the Company reclassified its held-to-maturity investment portfolio, with a carrying value of $ 1.8 billion and unrealized loss of $ 282.6 million, to the available-for-sale portfolio as part of the Company's balance sheet repositioning. Following the reclassification, the Company sold securities with a fair value of $ 1.4 billion, recognizing a pre-tax loss of $ 299.5 million upon sale. The fair value of trading securities is as follows: September 30, 2025 December 31, 2024 Held for Trading U.S. Treasury, federal agencies, and government sponsored agencies $ 598 $ — State and municipal — — U.S. government agency mortgage-backed securities — — Corporate notes — — Total trading securities $ 598 $ — For the three and nine-months ending September 30, 2025, the net gains (losses) on trading securities were determined to be immaterial to the consolidated financial statements. 12 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Fair Value Available for sale U.S. Treasury, federal agencies, and government sponsored agencies $ 2,258 $ — $ ( 457 ) $ — $ 1,801 State and municipal 243,521 — ( 41,687 ) — 201,834 U.S. government agency mortgage-backed securities 17,984 — ( 3,441 ) — 14,543 Corporate notes 18,259 — ( 2,760 ) — 15,499 Total available for sale investment securities $ 282,022 $ — $ ( 48,345 ) $ — $ 233,677 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Held to maturity U.S. Treasury, federal agencies, and government sponsored agencies $ 278,383 $ — $ ( 39,253 ) $ 239,130 State and municipal 1,048,862 958 ( 183,114 ) 866,706 U.S. government agency mortgage-backed securities 349,726 — ( 54,904 ) 294,822 Private labeled mortgage–backed pools 29,278 — ( 3,958 ) 25,320 Corporate notes 161,599 — ( 21,309 ) 140,290 Total held to maturity investment securities $ 1,867,848 $ 958 $ ( 302,538 ) $ 1,566,268 Less: Allowance for credit losses ( 158 ) Held to maturity securities, net of allowance for credit losses $ 1,867,690 13 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The amortized cost and fair value of securities available for sale and held to maturity at September 30, 2025 and December 31, 2024, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. September 30, 2025 December 31, 2024 Amortized Cost Fair Value Amortized Cost Fair Value Available for sale Within one year $ 31,763 $ 31,797 $ — $ — One to five years 49,247 48,529 — — Five to ten years 76,478 68,141 173,533 141,915 After ten years 277,388 240,873 90,505 77,219 434,876 389,340 264,038 219,134 U.S. government agency mortgage-backed securities 491,207 493,902 17,984 14,543 Total available for sale investment securities $ 926,083 $ 883,242 $ 282,022 $ 233,677 Held to maturity Within one year $ — $ — $ 59,129 $ 58,304 One to five years — — 298,362 278,007 Five to ten years — — 366,493 312,748 After ten years — — 764,860 597,067 — — 1,488,844 1,246,126 U.S. government agency mortgage-backed securities — — 349,726 294,822 Private labeled mortgage-backed pools — — 29,278 25,320 Total held to maturity investment securities $ — $ — $ 1,867,848 $ 1,566,268 14 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following tables show the gross unrealized losses and the fair value of the Company’s available for sale investments in which an allowance for credit losses were not recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position. September 30, 2025 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for Sale Investment Securities U.S. Treasury, federal agencies, and government sponsored agencies $ — $ — $ 15,694 $ ( 58 ) $ 15,694 $ ( 58 ) State and municipal 16,292 ( 255 ) 202,221 ( 40,460 ) 218,513 ( 40,715 ) U.S. government agency mortgage-backed securities 39,550 ( 466 ) ( 142 ) ( 14 ) 39,408 ( 480 ) Corporate notes — — 39,388 ( 4,361 ) 39,388 ( 4,361 ) Total available for sale investment securities $ 55,842 $ ( 721 ) $ 257,161 $ ( 44,893 ) $ 313,003 $ ( 45,614 ) December 31, 2024 Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for Sale Investment Securities U.S. Treasury, federal agencies, and government sponsored agencies $ — $ — $ 1,801 $ ( 457 ) $ 1,801 $ ( 457 ) State and municipal — — 201,834 ( 41,687 ) 201,834 ( 41,687 ) U.S. government agency mortgage-backed securities — — 14,543 ( 3,441 ) 14,543 ( 3,441 ) Corporate notes — — 15,499 ( 2,760 ) 15,499 ( 2,760 ) Total available for sale investment securities $ — $ — $ 233,677 $ ( 48,345 ) $ 233,677 $ ( 48,345 ) Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost. As of September 30, 2025 and December 31, 2024, the Company had 801 and 2,115 securities, respectively, with market values below their cost basis. The total fair value of these investments at September 30, 2025 and December 31, 2024 was $ 0.3 billion and $ 1.8 billion, which is approximately 36 % and 86 %, respectively, of the Company's available for sale, and held to maturity securities portfolio. The Company determines credit losses on available-for-sale investment securities by a discounted cash flow approach using the security’s prepayment-adjusted effective interest rate. The allowance for credit losses is measured as the amount by which an investment security’s amortized cost exceeds the net present value of expected future cash flows. However, the amount of credit losses for available-for-sale investment securities is limited to the amount of a security’s unrealized loss. 15 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following table details activity in the allowance for credit losses on available for sale debt securities during the three and nine months ended September 30, 2025 and 2024. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2025 2024 2025 2024 Beginning balance $ 150 $ — $ — $ — Credit loss expense (benefit) — — 150 — Ending balance $ 150 $ — $ 150 $ — Due to a specific issuer's deferral of principal and interest payments, the Company placed the security with a fair value of $ 2.9 million on non-accrual status and recorded a $ 150 thousand allowance for credit losses on certain corporate debt securities. Based on an evaluation of available evidence, management believes the unrealized losses on available for sale state and municipal securities, private labeled mortgage–backed pools and corporate notes, excluding certain securities disclosed above, were due to changes in interest rates. Due to the contractual terms, the issuers of state and municipal securities are not allowed to settle for less than the amortized cost of the security. The allowance for credit losses for held to maturity securities is a contra asset valuation account that is deducted from the carrying amount of held to maturity securities to present the net amount expected to be collected. Held to maturity securities are charged off against the allowance for credit loss when deemed uncollectible. Adjustments to the allowance for credit loss are reported in our Condensed Consolidated Statements of Income in credit loss expense. The Company measures expected credit losses on held to maturity securities on a collective basis by major security type with each type sharing similar risk characteristics, and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. With regards to U.S. Government-sponsored treasuries, agency and mortgage-backed securities, all these securities are issued by a U.S. government-sponsored entity and have an implicit or explicit government guarantee; therefore, no allowance for credit losses has been recorded for these securities. With regard to obligations of states and municipal, private label mortgage-backed and corporate note held to maturity securities, we consider (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities. Historical loss rates associated with securities having similar grades as those in our portfolio have been insignifica nt. As of September 30, 2025 and December 31, 2024, there were no past due principal and interest payments associated with these securities. An allowance for credit loss of $ 0 and $ 158 thousand was recorded on these securities based on applying the long-term historical rating agency credit loss rate for similarly rated securities at September 30, 2025 a nd December 31, 2024, respectively. On a quarterly basis, the Company refreshes the credit quality indicator of each held-to-maturity security. The Company applies ratings derived from Nationally Recognized Statistical Rating Organizations ("NRSRO"), specifically Moody's and Standard & Poor's. For state and municipal securities where no rating is available from the NRSROs, a consistent internally-assigned rating methodology is applied. The amortized cost of the state and municipal securities in the following tables subject to this methodology totaled $ 0 as of September 30, 2025, and $ 125.0 million as of December 31, 2024. 16 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following table summarizes credit ratings of our held-to-maturity securities at amortized cost for the periods indicated: September 30, 2025 AAA AA A BBB BB Not Rated Total U.S. Treasury, federal agencies, and government sponsored agencies $ — $ — $ — $ — $ — $ — $ — State and municipal — — — — — — — U.S. government agency mortgage-backed securities — — — — — — — Private labeled mortgage-backed pools — — — — — — — Corporate notes — — — — — — — Total $ — $ — $ — $ — $ — $ — $ — December 31, 2024 AAA AA A BBB BB Not Rated Total U.S. Treasury, federal agencies, and government sponsored agencies $ — $ 278,383 $ — $ — $ — $ — $ 278,383 State and municipal 273,629 698,428 66,079 10,726 — — 1,048,862 U.S. government agency mortgage-backed securities 349,726 — — — — — 349,726 Private labeled mortgage-backed pools 29,278 — — — — — 29,278 Corporate notes — 6,176 11,549 75,603 4,543 63,728 161,599 Total $ 652,633 $ 982,987 $ 77,628 $ 86,329 $ 4,543 $ 63,728 $ 1,867,848 The following table details activity in the allowance for credit losses on held-to-maturity securities during the three and nine months ended September 30, 2025 and 2024. Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2025 2024 2025 2024 Beginning balance $ 142 $ 158 $ 158 $ 157 Credit loss expense (benefit) ( 142 ) — ( 158 ) 1 Ending balance $ — $ 158 $ — $ 158 Accrued interest receivable on available for sale debt securities and held to maturity secur ities totaled $ 5.1 million at September 30, 2025 and $ 12.7 million at December 31, 2024 and is excluded from the estimate of credit losses. The U.S. government sponsored entities and agencies and mortgage–backed securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses. Therefore, for those securities, we do not record expected credit losses. 17 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Information regarding securities proceeds, gross gains, and gross losses are presented below: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2025 2024 2025 2024 Sales of available for sale securities Proceeds $ 1,405,738 $ — $ 1,409,870 $ — Gross gains — — — — Gross losses ( 299,132 ) — ( 299,538 ) — The tax benefit of the proceeds from the sale of securities available for sale was $ 62.9 million for the three and nine months ended September 30, 2025 . The following table represents the fair value and amortized costs of pledged securities, excluding overnight repurchase agreements. September 30, 2025 December 31, 2024 Fair Value Amortized Cost Fair Value Amortized Cost Pledged securities for borrowing availability at the Federal Reserve $ — $ — $ 851,384 $ 1,032,916 Pledge securities for FHLB borrowings — — 279,136 333,613 Pledged securities for derivative instruments 27,660 27,391 0 0 Note 3 – Loans The table below identifies the Company’s loan portfolio segments and classes. Portfolio Segment Class of Financing Receivable Commercial Owner occupied real estate Non-owner occupied real estate Residential spec homes Development & spec land Commercial and industrial Residential real estate Residential mortgage Residential construction Consumer Direct installment Indirect installment Home equity Portfolio segment is defined as a level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses. Class of financing receivable is defined as a group of financing receivables determined on the basis of both of the following, 1) risk characteristics of the financing receivable, and 2) an entity’s method for monitoring and assessing credit risk. Generally, the Bank does not move loans from a revolving loan to a term loan other than construction loans. Construction loans are reviewed and rewritten prior to being originated as a term loan. 18 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following table presents outstanding loans held for investment by portfolio class, as of September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Commercial Owner occupied real estate $ 709,374 $ 667,165 Non–owner occupied real estate 1,610,937 1,501,456 Residential spec homes 16,783 15,611 Development & spec land 29,862 18,627 Commercial and industrial 989,609 875,297 Total commercial 3,356,565 3,078,156 Real estate Residential mortgage 757,342 783,961 Residential construction 26,508 18,948 Total real estate 783,850 802,909 Consumer Direct installment 82,377 97,190 Indirect installment 23,341 303,901 Home equity 577,536 564,884 Total consumer 683,254 965,975 Total loans 4,823,669 4,847,040 Allowance for credit losses ( 50,178 ) ( 51,980 ) Net loans $ 4,773,491 $ 4,795,060 Total loans include net unearned discounts and deferred loan costs of $ 7.2 million at September 30, 2025 and $ 14.9 million at December 31, 2024, respectively. 19 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Non–performing Loans The following table presents non–accrual loans and loans past due over 90 days still on accrual by class of loans at September 30, 2025: September 30, 2025 Total Non-accrual Loans Past Due Over 90 Days Still Accruing Non-accruing Loans with no Allowance for Credit Losses Commercial Owner occupied real estate $ 5,171 $ — $ 1,363 Non–owner occupied real estate 3,258 — 139 Residential spec homes — — — Development & spec land 510 — — Commercial and industrial 3,364 — 1,060 Total commercial 12,303 — 2,562 Real estate Residential mortgage 9,256 — — Residential construction — — — Total real estate 9,256 — — Consumer Direct installment 604 259 — Indirect installment 1,159 173 — Home equity 6,036 1,176 — Total consumer 7,799 1,608 — Total $ 29,358 $ 1,608 $ 2,562 20 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following table presents non–accrual loans and loans past due over 90 days still on accrual by class of loan at December 31, 2024: December 31, 2024 Total Non-accrual Loans Past Due Over 90 Days Still Accruing Non-accruing Loans with no Allowance for Credit Losses Commercial Owner occupied real estate $ 2,448 $ — $ 1,419 Non–owner occupied real estate 444 — 444 Residential spec homes — — — Development & spec land 534 — 534 Commercial and industrial 2,232 — 1,239 Total commercial 5,658 — 3,636 Real estate Residential mortgage 11,215 — — Residential construction — — — Total real estate 11,215 — — Consumer Direct installment 338 128 — Indirect installment 1,542 358 — Home equity 7,039 680 — Total consumer 8,919 1,166 — Total $ 25,792 $ 1,166 $ 3,636 There was no interest income recognized on non-accrual loans during the three and nine months periods ended September 30, 2025 and 2024, respectively, while the loans were in non-accrual status. The amount of accrued interest receivable written off by the Company by reversing interest income was not material during the three and nine months periods ended September 30, 2025 and 2024, respectively. 21 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following table presents the payment status by class of loan at September 30, 2025: September 30, 2025 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due Total Past Due Total Loans Commercial Owner occupied real estate $ 704,038 $ 44 $ 3,973 $ 1,318 $ 5,335 $ 709,373 Non–owner occupied real estate 1,605,731 2,357 — 2,849 5,206 1,610,937 Residential spec homes 16,783 — — — — 16,783 Development & spec land 29,352 510 — — 510 29,862 Commercial and industrial 982,095 2,858 2,095 2,561 7,514 989,609 Total commercial 3,337,999 5,769 6,068 6,728 18,565 3,356,564 Real estate Residential mortgage 747,424 79 3,827 6,012 9,918 757,342 Residential construction 26,508 — — — — 26,508 Total real estate 773,932 79 3,827 6,012 9,918 783,850 Consumer Direct installment 78,619 2,860 215 684 3,759 82,378 Indirect installment 19,052 3,038 543 708 4,289 23,341 Home equity 563,614 6,625 1,998 5,299 13,922 577,536 Total consumer 661,285 12,523 2,756 6,691 21,970 683,255 Total $ 4,773,216 $ 18,371 $ 12,651 $ 19,431 $ 50,453 $ 4,823,669 22 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following table presents the payment status by class of loan at December 31, 2024: December 31, 2024 Current 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due Total Past Due Total Loans Commercial Owner occupied real estate $ 665,875 $ 1,195 $ — $ 95 $ 1,290 $ 667,165 Non–owner occupied real estate 1,500,229 931 — 296 1,227 1,501,456 Residential spec homes 15,611 — — — — 15,611 Development & spec land 18,627 — — — — 18,627 Commercial and industrial 872,893 2,155 70 179 2,404 875,297 Total commercial 3,073,235 4,281 70 570 4,921 3,078,156 Real estate Residential mortgage 773,214 — 4,163 6,584 10,747 783,961 Residential construction 18,948 — — — — 18,948 Total real estate 792,162 — 4,163 6,584 10,747 802,909 Consumer Direct installment 95,337 1,325 181 347 1,853 97,190 Indirect installment 298,048 4,179 806 868 5,853 303,901 Home equity 551,483 7,143 1,537 4,721 13,401 564,884 Total consumer 944,868 12,647 2,524 5,936 21,107 965,975 Total $ 4,810,265 $ 16,928 $ 6,757 $ 13,090 $ 36,775 $ 4,847,040 The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Modified Loans The following tables detail the amortized cost at September 30, 2025 of loans that were modified to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2025 and the amortized cost at September 30, 2024, of loans that were modified to borrowers experiencing financial difficulty during the three and nine months periods ended September 30, 2024: Three Months Ended September 30, 2025 Term Extension Interest Rate Reduction Other-Than-Insignificant Payment Delay Term Extension and Interest Rate Reduction Total % of Loans Held for Investment Commercial Owner occupied real estate $ 550 $ — $ 3,007 $ — $ 3,557 0.51 % Non-owner occupied real estate — — — — — — % Development spec & land — — — — — — % Commercial and industrial 757 — 246 — 1,003 0.10 % Total $ 1,307 $ — $ 3,253 $ — $ 4,560 0.09 % 23 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Nine Months Ended September 30, 2025 Term Extension Interest Rate Reduction Other-Than-Insignificant Payment Delay Term Extension and Interest Rate Reduction Total % of Loans Held for Investment Commercial Owner occupied real estate $ 550 $ — $ 3,412 $ — $ 3,962 0.56 % Non-owner occupied real estate 409 — — — 409 0.03 % Development spec & land 510 — — — 510 1.74 % Commercial and industrial 1,929 — 650 1,525 4,104 0.42 % Total $ 3,398 $ — $ 4,062 $ 1,525 $ 8,985 0.19 % Three Months Ended September 30, 2024 Term Extension Interest Rate Reduction Other-Than-Insignificant Payment Delay Term Extension and Interest Rate Reduction Total % of Loans Held for Investment Commercial Owner occupied real estate $ 2,038 $ — $ — $ — $ 2,038 0.32 % Non-owner occupied real estate — — — — — — % Development spec & land — — — — — — % Commercial and industrial 1,111 — — — 1,111 0.14 % Total $ 3,149 $ — $ — $ — $ 3,149 0.07 % Nine Months Ended September 30, 2024 Term Extension Interest Rate Reduction Other-Than-Insignificant Payment Delay Term Extension and Interest Rate Reduction Total % of Loans Held for Investment Commercial Owner occupied real estate $ 3,986 $ — $ — $ — $ 3,986 0.63 % Non-owner occupied real estate 1,720 — 651 — 2,371 0.17 % Development spec & land — — — — — — % Commercial and industrial 2,205 — — 437 2,642 0.33 % Total $ 7,911 $ — $ 651 $ 437 $ 8,999 0.19 % The following tables summarize the financial impacts of loan modifications and payment deferrals, as applicable, during the three and nine months periods ended September 30, 2025 and 2024: 24 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Three Months Ended September 30, 2025 Weighted Average Term Extension (In Months) Weighted average interest rate reduction (In Percentage Terms) Weighted Average Payment Delay (In Months) Term Extension (In Months) & Rate Reduction (In Percentage Terms) Commercial Owner occupied real estate 9 — % 10 0 Non-owner occupied real estate 0 — % 0 0 Development spec & land 0 — % 0 0 Commercial and industrial 7 — % 1 0 Nine Months Ended September 30, 2025 Weighted Average Term Extension (In Months) Weighted average interest rate reduction (Int Percentage Terms) Weighted Average Payment Delay (In Months) Term Extension (In Months) & Rate Reduction (In Percentage Terms) Commercial Owner occupied real estate 9 — % 6 0 Non-owner occupied real estate 12 — % 0 0 Development spec & land 12 — % 0 0 Commercial and industrial 9 — % 6 Weighted average term extension of 36 months & weighted average interest rate reduction of 1.73 % Three Months Ended September 30, 2024 Weighted Average Term Extension (In Months) Weighted average interest rate reduction (In Percentage Terms) Weighted Average Payment Delay (In Months) Term Extension (In Months) & Rate Reduction (In Percentage Terms) Commercial Owner occupied real estate 6 — % 0 0 Non-owner occupied real estate 0 — % 0 0 Development spec & land 0 — % 0 0 Commercial and industrial 21 — % 0 Weighted average term extension of 0 months & Weighted average interest rate reduction of — % 25 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Nine Months Ended September 30, 2024 Weighted Average Term Extension (In Months) Weighted average interest rate reduction (Int Percentage Terms) Weighted Average Payment Delay (In Months) Term Extension (In Months) & Rate Reduction (In Percentage Terms) Commercial Owner occupied real estate 7 — % 0 0 Non-owner occupied real estate 15 — % 5 0 Development spec & land 0 — % 0 0 Commercial and industrial 15 — % 0 Weighted average term extension of 14 months & weighted average interest rate reduction of 2.03 % The financial impacts of the modifications did not significantly impact our determination of the allowance for credit losses during the periods presented above. The following table presents the amortized cost basis at September 30, 2025 of loans to borrowers experiencing financial difficulty that had been modified within the previous 12 months: September 30, 2025 Current 30-89 Days Past Due 90 Days Past Due Total Commercial Owner occupied real estate $ 6,380 $ — $ — $ 6,380 Non-owner occupied real estate — 409 — 409 Development spec & land — 510 — 510 Commercial and industrial 5,245 — — 5,245 Total $ 11,625 $ 919 $ — $ 12,544 The following table presents the amortized cost basis at September 30, 2024 of loans to borrowers experiencing financial difficulty that had been modified within the previous 12 months: September 30, 2024 Current 30-89 Days Past Due 90 Days Past Due Total Commercial Owner occupied real estate $ 3,986 $ — $ — $ 3,986 Non-owner occupied real estate 2,371 — — 2,371 Development spec & land — — — — Commercial and industrial 2,641 — — 2,641 Total $ 8,998 $ — $ — $ 8,998 On an ongoing basis, we monitor the performance of all modified loans according to their modified terms. The amortized cost of modified loans that had a payment default during the three and nine months ended September 30, 2025, which were still in default at period end, and were within 12 months or less of being modified was $ 0.9 and $ 3.7 million respectively. For the three and nine months ended September 30, 2024, the Company had $ — and $ 1.3 million in payment defaults, respectively. 26 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) For purposes of this disclosure, the Company considers “default” to mean 30 days or more past due of contractual interest or principal. Collateral Dependent Financial Assets A collateral dependent financial loan relies solely on the operation or sale of the collateral for repayment. In evaluating the overall risk associated with the loan, the Company considers character, overall financial condition and resources, and payment record of the borrower; the prospects for support from any financially responsible guarantors; and the nature and degree of protection provided by the cash flow and value of any underlying collateral. However, as other sources of repayment become inadequate over time, the significance of the collateral's value increases and the loan may become collateral dependent. The tables below present the amortized cost basis and allowance for credit losses (“ACL”) allocated for collateral dependent loans in accordance with ASC 326, which are individually evaluated to determine expected credit losses, at September 30, 2025 and December 31, 2024. September 30, 2025 Real Estate Accounts Receivable/ Equipment Other Total ACL Allocation Commercial Owner occupied real estate $ 5,171 $ — $ — $ 5,171 $ 115 Non–owner occupied real estate 3,258 — — 3,258 214 Development & spec land 510 — — 510 — Commercial and industrial 1,005 2,359 — 3,364 529 Total commercial 9,944 2,359 — 12,303 858 Total collateral dependent loans (1) $ 9,944 $ 2,359 $ — $ 12,303 $ 858 (1) Collateral dependent loans had a collateral fair value of $ 8.7 million at September 30, 2025 December 31, 2024 Real Estate Accounts Receivable/ Equipment Other Total ACL Allocation Commercial Owner occupied real estate $ 2,448 $ — $ — $ 2,448 $ 224 Non–owner occupied real estate 444 — — 444 — Development & spec land 534 — — 534 — Commercial and industrial 1,756 476 — 2,232 731 Total commercial 5,182 476 — 5,658 955 Total collateral dependent loans (1) $ 5,182 $ 476 $ — $ 5,658 $ 955 (1) Collateral dependent loans had a collateral fair value of $ 3.4 million at December 31, 2024 As of September 30, 2025, the Company had a carrying value of $ 1.5 million of repossessed assets. As of September 30, 2025, the Company had a recorded net investment of $ 0.3 million o f consumer mortgage loans in which foreclosure proceedings have commenced. Repossessed assets are a component of other assets within the condensed consolidated balance sheet. Credit Quality Indicators 27 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Horizon Bank’s processes for determining credit quality differ slightly depending on whether a new loan or a renewed loan is being underwritten, or whether an existing loan is being re–evaluated for credit quality. The latter usually occurs upon receipt of current financial information or other pertinent data that would trigger a change in the credit quality grade. • For new and renewed commercial loans, the Bank’s Credit Department, which acts independently of the loan officer, assigns the credit quality grade to the loan. Loan grades for loans with an aggregate credit exposure that exceeds the authorities in the respective regions (ranging from $ 3,000,000 to $ 6,000,000 ) are validated by the Loan Committee, which is chaired by the Chief Commercial Banking Officer (“CCBO”). • Commercial loan officers are responsible for reviewing their loan portfolios and promptly assessing any adverse change in credit quality and revising the risk rating appropriately. When circumstances warrant a change in the credit quality grade, loan officers are required to notify the Credit Department of the change in the credit quality grade. Downgrades are accepted immediately, however, lenders must present their factual information to the Credit Department when recommending an upgrade. Downgrades to impaired status require the concurrence of the CCBO and the Senior Workout Loan Manager. • The CCBO, or a designee, meets periodically with loan officers to discuss the status of past due loans and classified loans. These meetings are also designed to give the loan officers an opportunity to identify an existing loan that should be downgraded to a classified grade. • Monthly, senior management meets as members of the Watch Committee, which reviews all of the past due, classified, and impaired loans and the relative trends of these assets. This committee also reviews the actions taken by management regarding foreclosure mitigation, loan extensions, loan modifications, other real estate owned and personal property repossessions. The information reviewed in this meeting acts as a precursor for developing management’s analysis of the adequacy of the Allowance for Credit Losses on Loans and Leases. For residential real estate and consumer loans, Horizon uses a grading system based on delinquency. Loans that are 90 days or more past due, on non–accrual, or are classified as modified loans are graded “Substandard.” After being 90 to 120 days delinquent a loan is charged off unless it is well secured and in the process of collection. If the latter case exists, the loan is placed on non–accrual. Occasionally a mortgage loan may be graded as “Special Mention.” When this situation arises, it is because the characteristics of the loan and the borrower fit the definition of a Risk Grade 5 described below, which is normally used for grading commercial loans. Loans not graded Substandard are considered Pass. Horizon Bank employs a nine–grade rating system to determine the credit quality of commercial loans. The first five grades represent acceptable quality, and the last four grades mirror the criticized and classified grades used by the bank regulatory agencies (special mention, substandard, doubtful, and loss). The loan grade definitions are detailed below. Risk Grade 1: Excellent (Pass) Loans secured by liquid collateral, such as certificates of deposit, reputable bank letters of credit, or other cash equivalents or loans to any publicly held company with a current long–term debt rating of A or better and meeting defined key financial metric ranges. Risk Grade 2: Good (Pass) Loans to businesses that have strong financial statements containing an unqualified opinion from a CPA firm and at least three years consecutive years of profits; loans supported by unaudited financial statements containing strong balance sheets, five consecutive years of profits, a five year satisfactory relationship with the Bank, and key balance sheet and income statement trends that are either stable or positive; loans secured by publicly traded marketable securities with required margins where there is no impediment to liquidation; loans to individuals backed by liquid personal assets and unblemished credit histories; or loans to publicly held companies with current long–term debt ratings of Baa or better and meeting defined key financial metric ranges. Risk Grade 3: Satisfactory (Pass) Loans supported by financial statements (audited or unaudited) that indicate average or slightly below average risk and having some deficiency or vulnerability to changing economic conditions; loans with some weakness but offsetting features of other support are readily available; loans that are meeting the terms of repayment, but which may be susceptible to deterioration if adverse factors are encountered and meeting defined key financial metric 28 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) ranges. Loans may be graded Satisfactory when there is no recent information on which to base a current risk evaluation and the following conditions apply: • At inception, the loan was properly underwritten, did not possess an unwarranted level of credit risk, and the loan met the above criteria for a risk grade of Excellent, Good, or Satisfactory; • At inception, the loan was secured with collateral possessing a loan value adequate to protect the Bank from loss. • The loan has exhibited two or more years of satisfactory repayment with a reasonable reduction of the principal balance. • During the period that the loan has been outstanding, there has been no evidence of any credit weakness. Some examples of weakness include slow payment, lack of cooperation by the borrower, breach of loan covenants, or the borrower is in an industry known to be experiencing problems. If any of these credit weaknesses is observed, a lower risk grade may be warranted. Risk Grade 4: Satisfactory/Monitored Loans in this category are considered to be of acceptable credit quality, but contain greater credit risk than Satisfactory rated loans and meet defined key financial metric ranges. Borrower displays acceptable liquidity, leverage, and earnings performance within the Bank’s minimum underwriting guidelines. The level of risk is acceptable but conditioned on the proper level of loan officer supervision. Loans that normally fall into this grade include acquisition, construction and development loans and income producing properties that have not reached stabilization. Risk Grade 4W: Management Watch Loans in this category are considered to be of acceptable quality and meet defined key financial metric ranges, but with above normal risk. Borrower displays potential indicators of weakness in the primary source of repayment resulting in a higher reliance on secondary sources of repayment. Balance sheet may exhibit weak liquidity and/or high leverage. There is inconsistent earnings performance without the ability to sustain adverse economic conditions. Borrower may be operating in a declining industry or the property type, as for a commercial real estate loan, may be high risk or in decline. These loans require an increased level of loan officer supervision and monitoring to assure that any deterioration is addressed in a timely fashion. Commercial construction loans are graded as 4W Management Watch until the projects are completed and stabilized. Risk Grade 5: Special Mention Loans which possess some temporary (normally less than one year) credit deficiency or potential weakness which deserves close attention. Such loans pose an unwarranted financial risk that, if not corrected, could weaken the loan by adversely impacting the future repayment ability of the borrower. The key distinctions of a Special Mention classification are that (1) it is indicative of an unwarranted level of risk and (2) weaknesses are considered “potential,” not “defined,” impairments to the primary source of repayment. These loans may be to borrowers with adverse trends in financial performance, collateral value and/or marketability, or balance sheet strength and must meet defined key financial metric ranges. Risk Grade 6: Substandard One or more of the following characteristics may be exhibited in loans classified Substandard: • Loans which possess a defined credit weakness. The likelihood that a loan will be paid from the primary source of repayment is uncertain. Financial deterioration is under way and very close attention is warranted to ensure that the loan is collected without loss. • Loans are inadequately protected by the current net worth and paying capacity of the obligor. • The primary source of repayment is gone, and the Bank is forced to rely on a secondary source of repayment, such as collateral liquidation or guarantees. • Loans have a distinct possibility that the Bank will sustain some loss if deficiencies are not corrected. • Unusual courses of action are needed to maintain a high probability of repayment. 29 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) • The borrower is not generating enough cash flow to repay loan principal; however, it continues to make interest payments. • The lender is forced into a subordinated or unsecured position due to flaws in documentation. • Loans have been restructured so that payment schedules, terms, and collateral represent concessions to the borrower when compared to the normal loan terms. • The lender is seriously contemplating foreclosure or legal action due to the apparent deterioration in the loan. • There is a significant deterioration in market conditions to which the borrower is highly vulnerable. • The borrower meets defined key financial metric ranges. Risk Grade 7: Doubtful One or more of the following characteristics may be present in loans classified Doubtful: • Loans have all of the weaknesses of those classified as Substandard. However, based on existing conditions, these weaknesses make full collection of principal highly improbable. • The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment. • The possibility of loss is high but because of certain important pending factors which may strengthen the loan, loss classification is deferred until the exact status of repayment is known. • The borrower meets defined key financial metric ranges. Risk Grade 8: Loss Loans are considered uncollectible and of such little value that continuing to carry them as assets is not feasible. Loans will be classified Loss when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future. 30 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following tables present loans by credit grades and origination year at September 30, 2025. September 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Term Loans Revolving Loans Total Commercial Owner occupied real estate Pass $ 89,674 $ 78,616 $ 84,470 $ 82,654 $ 63,771 $ 187,836 $ 80,366 $ 13,251 $ 680,638 Special Mention — 1,030 — — 1,391 5,335 2,357 100 10,213 Substandard — 3,206 9,449 2,728 — 2,590 — 550 18,523 Doubtful — — — — — — — — — Total owner occupied real estate $ 89,674 $ 82,852 $ 93,919 $ 85,382 $ 65,162 $ 195,761 $ 82,723 $ 13,901 $ 709,374 Gross charge-offs during period $ 109 $ 257 $ — $ 50 $ — $ 22 $ 33 $ — $ 471 Non–owner occupied real estate Pass $ 129,841 $ 185,379 $ 125,563 $ 233,754 $ 149,076 $ 423,758 $ 307,194 $ 14,125 $ 1,568,690 Special Mention 490 — 1,312 28,391 — — — — 30,193 Substandard — 2,181 3,908 620 — 5,277 68 — 12,054 Doubtful — — — — — — — — — Total non–owner occupied real estate $ 130,331 $ 187,560 $ 130,783 $ 262,765 $ 149,076 $ 429,035 $ 307,262 $ 14,125 $ 1,610,937 Gross charge-offs during period $ — $ — $ — $ — $ — $ — $ — $ — $ — Residential spec homes Pass $ 2,173 $ 301 $ — $ — $ — $ — $ 8,895 $ 5,414 $ 16,783 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful — — — — — — — — — Total residential spec homes $ 2,173 $ 301 $ — $ — $ — $ — $ 8,895 $ 5,414 $ 16,783 Gross charge-offs during period $ — $ — $ — $ — $ — $ — $ — $ — $ — Development & spec land Pass $ 3,196 $ 817 $ 4,026 $ 757 $ 1,118 $ 2,043 $ 17,395 $ — $ 29,352 Special Mention — — — — — — — — — Substandard — — — — — — 510 — 510 Doubtful — — — — — — — — — Total development & spec land $ 3,196 $ 817 $ 4,026 $ 757 $ 1,118 $ 2,043 $ 17,905 $ — $ 29,862 Gross charge-offs during period $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial Pass $ 232,182 $ 207,007 $ 81,826 $ 109,494 $ 57,518 $ 50,986 $ 47,224 $ 163,815 $ 950,052 Special Mention 1,451 1,768 442 557 33 331 11,072 10,417 26,071 Substandard 1,904 1,705 4,473 146 49 1,687 1,064 2,458 13,486 Doubtful — — — — — — — — — Total commercial and industrial $ 235,537 $ 210,480 $ 86,741 $ 110,197 $ 57,600 $ 53,004 $ 59,360 $ 176,690 $ 989,609 Gross charge-offs during period $ — $ — $ — $ — $ — $ — $ — $ — $ — Total commercial $ 460,911 $ 482,010 $ 315,469 $ 459,101 $ 272,956 $ 679,843 $ 476,145 $ 210,130 $ 3,356,565 31 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) September 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Term Loans Revolving Loans Total Real estate Residential mortgage Performing $ 50,764 $ 72,055 $ 114,833 $ 148,243 $ 130,929 $ 231,262 $ — $ — $ 748,086 Non–performing — 186 3,610 973 361 4,126 — — 9,256 Total residential mortgage $ 50,764 $ 72,241 $ 118,443 $ 149,216 $ 131,290 $ 235,388 $ — $ — $ 757,342 Gross charge-offs during period $ — $ 135 $ 82 $ 188 $ 355 $ 83 $ — $ — $ 843 Residential construction Performing $ — $ — $ — $ — $ — $ — $ 26,508 $ — $ 26,508 Non–performing — — — — — — — — — Total residential construction $ — $ — $ — $ — $ — $ — $ 26,508 $ — $ 26,508 Gross charge-offs during period $ — $ — $ — $ — $ — $ — $ — $ — $ — Total real estate $ 50,764 $ 72,241 $ 118,443 $ 149,216 $ 131,290 $ 235,388 $ 26,508 $ — $ 783,850 September 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Term Loans Revolving Loans Total Consumer Direct installment Performing $ 7,651 $ 7,068 $ 50,076 $ 5,834 $ 3,612 $ 5,744 $ 11 $ 1,518 $ 81,514 Non–performing — 16 665 73 78 31 — — 863 Total direct installment $ 7,651 $ 7,084 $ 50,741 $ 5,907 $ 3,690 $ 5,775 $ 11 $ 1,518 $ 82,377 Gross charge-offs during period $ 3 $ 100 $ 65 $ 52 $ 53 $ — $ 7 $ — $ 280 Indirect installment Performing $ — $ 318 $ 4,424 $ 10,891 $ 3,907 $ 2,469 $ — $ — $ 22,009 Non–performing — 40 236 616 262 178 — — 1,332 Total indirect installment $ — $ 358 $ 4,660 $ 11,507 $ 4,169 $ 2,647 $ — $ — $ 23,341 Gross charge-offs during period $ — $ 200 $ 598 $ 889 $ 315 $ 188 $ — $ — $ 2,190 Home equity Performing $ 10,457 $ 11,436 $ 17,405 $ 13,678 $ 4,589 $ 8,421 $ 30,246 $ 474,092 $ 570,324 Non–performing — 83 623 432 2 173 5,899 — 7,212 Total home equity $ 10,457 $ 11,519 $ 18,028 $ 14,110 $ 4,591 $ 8,594 $ 36,145 $ 474,092 $ 577,536 Gross charge-offs during period $ — $ — $ 20 $ 7 $ — $ 56 $ 788 $ — $ 871 Total consumer $ 18,108 $ 18,961 $ 73,429 $ 31,524 $ 12,450 $ 17,016 $ 36,156 $ 475,610 $ 683,254 32 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following tables present loans by credit grades and origination year at December 31, 2024. December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Term Loans Revolving Loans Total Commercial Owner occupied real estate Pass $ 75,649 $ 74,305 $ 90,872 $ 68,978 $ 36,778 $ 178,936 $ 92,227 $ 12,365 $ 630,110 Special Mention 129 — 1,724 1,769 142 8,759 — 100 12,623 Substandard 2,970 8,761 1,051 6,307 — 4,843 — 500 24,432 Doubtful — — — — — — — — — Total owner occupied real estate $ 78,748 $ 83,066 $ 93,647 $ 77,054 $ 36,920 $ 192,538 $ 92,227 $ 12,965 $ 667,165 Gross charge-offs during period $ — $ — $ — $ — $ — $ 1 $ — $ — $ 1 Non–owner occupied real estate Pass $ 194,167 $ 115,378 $ 244,266 $ 133,689 $ 100,688 $ 344,558 $ 298,288 $ 11,726 $ 1,442,760 Special Mention — 4,211 16,409 1,249 — 31,083 — — 52,952 Substandard 83 297 — — — 5,364 — — 5,744 Doubtful — — — — — — — — — Total non–owner occupied real estate $ 194,250 $ 119,886 $ 260,675 $ 134,938 $ 100,688 $ 381,005 $ 298,288 $ 11,726 $ 1,501,456 Gross charge-offs during period $ — $ — $ — $ — $ — $ — $ — $ — $ — Residential spec homes Pass $ 362 $ — $ — $ 420 $ — $ — $ 10,986 $ 3,843 $ 15,611 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful — — — — — — — — — Total residential spec homes $ 362 $ — $ — $ 420 $ — $ — $ 10,986 $ 3,843 $ 15,611 Gross charge-offs during period $ — $ — $ — $ — $ — $ — $ — $ — $ — Development & spec land Pass $ 819 $ 4,139 $ 788 $ 1,133 $ 328 $ 2,039 $ 7,931 $ 599 $ 17,776 Special Mention — — — — — 317 — — 317 Substandard — — — — — — 534 — 534 Doubtful — — — — — — — — — Total development & spec land $ 819 $ 4,139 $ 788 $ 1,133 $ 328 $ 2,356 $ 8,465 $ 599 $ 18,627 Gross charge-offs during period $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial Pass $ 242,562 $ 105,877 $ 128,707 $ 73,008 $ 6,954 $ 54,764 $ 48,313 $ 179,370 $ 839,555 Special Mention 1,246 324 1,245 28 1 1,573 9,519 9,281 23,217 Substandard 843 2,599 318 217 266 3,170 1,003 4,109 12,525 Doubtful — — — — — — — — — Total commercial and industrial $ 244,651 $ 108,800 $ 130,270 $ 73,253 $ 7,221 $ 59,507 $ 58,835 $ 192,760 $ 875,297 Gross charge-offs during period $ — $ — $ — $ — $ — $ 45 $ 108 $ — $ 153 Total commercial $ 518,830 $ 315,891 $ 485,380 $ 286,798 $ 145,157 $ 635,406 $ 468,801 $ 221,893 $ 3,078,156 33 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Term Loans Revolving Loans Total Real estate Residential mortgage Performing $ 69,264 $ 145,927 $ 160,780 $ 140,310 $ 78,563 $ 177,902 $ — $ — $ 772,746 Non–performing 201 1,619 2,125 1,472 706 5,092 — — 11,215 Total residential mortgage $ 69,465 $ 147,546 $ 162,905 $ 141,782 $ 79,269 $ 182,994 $ — $ — $ 783,961 Gross charge-offs during period $ — $ — $ — $ — $ — $ 5 $ — $ — $ 5 Residential construction Performing $ — $ — $ — $ — $ — $ — $ 18,948 $ — $ 18,948 Non–performing — — — — — — — — — Total residential construction $ — $ — $ — $ — $ — $ — $ 18,948 $ — $ 18,948 Gross charge-offs during period $ — $ — $ — $ — $ — $ — $ — $ — $ — Mortgage warehouse Performing $ — $ — $ — $ — $ — $ — $ — $ — $ — Non–performing — — — — — — — — — Total mortgage warehouse $ — $ — $ — $ — $ — $ — $ — $ — $ — Gross charge-offs during period $ — $ — $ — $ — $ — $ — $ — $ — $ — Total real estate $ 69,465 $ 147,546 $ 162,905 $ 141,782 $ 79,269 $ 182,994 $ 18,948 $ — $ 802,909 December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Term Loans Revolving Loans Total Consumer Direct installment Performing $ 11,306 $ 59,850 $ 9,510 $ 5,398 $ 2,679 $ 6,003 $ 60 $ 1,918 $ 96,724 Non–performing 1 374 46 19 — 26 — — 466 Total direct installment $ 11,307 $ 60,224 $ 9,556 $ 5,417 $ 2,679 $ 6,029 $ 60 $ 1,918 $ 97,190 Gross charge-offs during period $ 72 $ 93 $ 169 $ 1 $ 35 $ 78 $ 9 $ — $ 457 Indirect installment Performing $ 26,839 $ 70,143 $ 130,610 $ 49,458 $ 17,647 $ 7,304 $ — $ — $ 302,001 Non–performing — 425 800 304 242 129 — — 1,900 Total indirect installment $ 26,839 $ 70,568 $ 131,410 $ 49,762 $ 17,889 $ 7,433 $ — $ — $ 303,901 Gross charge-offs during period $ 161 $ 449 $ 1,345 $ 527 $ 188 $ 99 $ — $ — $ 2,769 Home equity Performing $ 13,552 $ 21,845 $ 16,136 $ 5,110 $ 1,902 $ 9,210 $ 18,657 $ 470,753 $ 557,165 Non–performing — 421 426 — 30 296 6,465 81 7,719 Total home equity $ 13,552 $ 22,266 $ 16,562 $ 5,110 $ 1,932 $ 9,506 $ 25,122 $ 470,834 $ 564,884 Gross charge-offs during period $ — $ 23 $ 52 $ 88 $ — $ 39 $ 110 $ 11 $ 323 Total consumer $ 51,698 $ 153,058 $ 157,528 $ 60,289 $ 22,500 $ 22,968 $ 25,182 $ 472,752 $ 965,975 Note 4 – Allowance for Credit and Loan Losses The following tables represent, by loan portfolio segment, a summary of changes in the ACL on loans for the three and nine months ended September 30, 2025 and 2024: 34 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Three Months Ended September 30, 2025 Commercial Real Estate Mortgage Warehouse Consumer Total Balance, beginning of period $ 34,413 $ 3,229 $ — $ 16,757 $ 54,399 Credit loss expense (recovery) 271 ( 127 ) — ( 3,534 ) ( 3,390 ) Charge-offs ( 319 ) ( 415 ) — ( 1,008 ) ( 1,742 ) Recoveries 25 395 — 491 911 Balance, end of period $ 34,390 $ 3,082 $ — $ 12,706 $ 50,178 Three Months Ended September 30, 2024 Commercial Real Estate Mortgage Warehouse Consumer Total Balance, beginning of period $ 31,941 $ 2,588 $ 736 $ 16,950 $ 52,215 Credit loss expense (recovery) 861 78 126 ( 21 ) 1,044 Charge-offs ( 38 ) ( 2 ) — ( 731 ) ( 771 ) Recoveries 90 11 — 292 393 Balance, end of period $ 32,854 $ 2,675 $ 862 $ 16,490 $ 52,881 Nine Months Ended September 30, 2025 Commercial Real Estate Mortgage Warehouse Consumer Total Balance, beginning of period $ 30,953 $ 2,715 $ — $ 18,312 $ 51,980 Provision for credit losses on loans 3,768 393 — ( 4,009 ) 152 Charge-offs ( 471 ) ( 843 ) — ( 3,341 ) ( 4,655 ) Recoveries 140 817 — 1,744 2,701 Balance, end of period $ 34,390 $ 3,082 $ — $ 12,706 $ 50,178 Nine Months Ended September 30, 2024 Commercial Real Estate Mortgage Warehouse Consumer Total Balance, beginning of period $ 29,736 $ 2,503 $ 481 $ 17,309 $ 50,029 Provision for credit losses on loans 2,951 154 381 642 4,128 Charge-offs ( 149 ) ( 5 ) — ( 2,295 ) ( 2,449 ) Recoveries 316 23 — 834 1,173 Balance, end of period $ 32,854 $ 2,675 $ 862 $ 16,490 $ 52,881 The accrued interest receivable on our loan receivables is excluded from the allowance for credit loss estimate and is included in interest receivable on our consolidated balance sheets. As of September 30, 2025 and December 31, 2024, the accrued interest on our loan portfolio was $ 22.9 million and $ 25.6 million, respectively. The Company utilized the Cumulative Loss Rate method in determining expected future credit losses. The loss rate method measures the amount of loan charge–offs, net of recoveries, (“loan losses”) recognized over the life of a closed pool and 35 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) compares those loan losses to the outstanding loan balance of that pool as of a specific point in time (“pool date”). To estimate a CECL loss rate for the pool, management first identifies the loan losses recognized between the pool date and the reporting date for the pool and determines which loan losses were related to loans outstanding at the pool date. The loss rate method then divides the loan losses recognized on loans outstanding as of the pool date by the outstanding loan balance as of the pool date. The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company’s historical look–back period includes January 2009 through the current period, on a monthly basis. When historical credit loss experience is not sufficient for a specific portfolio, the Company may supplement its own portfolio data with external models or data. The Company supplemented data for 2009 and 2010 with the use of adjusted Uniform Bank Performance Report peer group data. Qualitative reserves reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration other analytics performed within the organization, such as enterprise and concentration management, along with other credit–related analytics as deemed appropriate. Management attempts to quantify qualitative reserves whenever possible. The Company’s CECL estimate applies to a forecast that incorporates macroeconomic trends and other environmental factors. Management utilized Moody's economic forecast scenarios including both National and Regional econometrics, as well as management judgment, as the basis for the forecast period. The historical loss rate was utilized as the base rate, and qualitative adjustments were utilized to reflect the forecast and other relevant factors. The Company segments the loan portfolio into pools based on the following risk characteristics: financial asset type, loan purpose, collateral type, loan characteristics, credit characteristics, outstanding loan balances, contractual terms and prepayment assumptions, industry of the borrower and concentrations, and historical or expected credit loss patterns. Liability for Commitments to Extend Credit and Standby Letters of Credit The following tables represent, by loan portfolio segment, a summary of changes in the activity in the liability for commitments to extend credit and standby letters of credit (please see note 14): Three Months Ended September 30, 2025 September 30, 2024 Balance, beginning of period Credit loss expense (reversal) Ending balance Balance, beginning of period Credit loss expense (reversal) Ending balance Commercial $ 1,545 $ ( 5 ) $ 1,540 $ — $ — $ — Real Estate 98 ( 2 ) 96 41 — 41 Mortgage Warehouse — — — — — — Consumer 669 ( 34 ) 635 664 — 664 Total $ 2,312 $ ( 41 ) $ 2,271 $ 705 $ — $ 705 Nine Months Ended September 30, 2025 September 30, 2024 Balance, beginning of period Credit loss expense (reversal) Ending balance Balance, beginning of period Credit loss expense (reversal) Ending balance Commercial $ 1,385 155 1,540 $ — — — Real Estate 61 35 96 64 ( 23 ) 41 Mortgage Warehouse — — — — — — Consumer 703 ( 68 ) 635 551 113 664 Total $ 2,149 $ 122 $ 2,271 $ 615 $ 90 $ 705 36 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Note 5 – Loan Servicing Loans serviced for others are not included in the accompanying condensed consolidated balance sheets. The unpaid principal balances of loans serviced for others totaled approximately $ 1.41 billion and $ 1.44 billion at September 30, 2025 and December 31, 2024. Activity for mortgage servicing rights and the related impairment allowance were as follows: Three Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Mortgage servicing rights Balances, January 1 $ 17,752 $ 18,432 $ 18,195 $ 18,807 Servicing rights capitalized 392 398 973 956 Amortization of servicing rights ( 531 ) ( 502 ) ( 1,555 ) ( 1,435 ) Ending balance 17,613 18,328 17,613 18,328 Impairment allowance Beginning balance — — — — Additions — — — — Reductions — — — — Ending balance — — — — Mortgage servicing rights, net $ 17,613 $ 18,328 $ 17,613 $ 18,328 Fair value, beginning of period $ 18,251 $ 19,091 19,766 19,891 Fair value, end of period 17,846 18,449 17,846 18,449 Fair value at September 30, 2025 was determined using a discounted cash flow analysis with the discount rates ranging from 8.5 % to 11.0 % and prepayment speeds ranging from 5.9 % to 12.1 %, depending on the stratification of the specific type. Fair value at September 30, 2024 was determined using a discounted cash flow analysis with a discount rate of 11.0 % and prepayment speeds ranging from 6.0 % to 12.0 %, depending on the stratification of the specific type. Note 6 – Goodwill The carrying amount of goodwill was $ 155.2 million as of September 30, 2025 and December 31, 2024, respectively. There were no changes in the carrying amount of goodwill for the three months ended September 30, 2025 and 2024. Goodwill is assessed for impairment annually, or more frequently if events occur or circumstances change that indicate an impairment may exist. When assessing goodwill for impairment, first, a qualitative assessment can be made to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its estimated carrying value. If the results of the qualitative assessment are not conclusive, a quantitative goodwill test is performed. Alternatively, a quantitative goodwill test can be performed without performing a qualitative assessment. No goodwill impairment charges were recorded for the nine months ended September 30, 2025 and 2024. Note 7 – Repurchase Agreements 37 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The Company transfers various securities to customers in exchange for cash at the end of each business day and agrees to acquire the securities at the end of the next business day for the cash exchanged plus interest. The process is repeated at the end of each business day until the agreement is terminated. The securities underlying the agreement remained under the Company’s control. The following tables show repurchase agreements accounted for as secured borrowings and the related securities, at fair value, pledged for repurchase agreements: September 30, 2025 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total Repurchase Agreements and repurchase-to-maturity transactions U.S. Treasury federal agencies $ — $ — $ — $ — $ — U.S. government agency mortgage-backed securities 86,966 — — — 86,966 Private labeled mortgage-backed pools — — — — — Total Repurchase Agreements $ 86,966 $ — $ — $ — $ 86,966 Repurchase Agreements subject to offsetting arrangements — December 31, 2024 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 Days 30-90 Days Greater Than 90 Days Total Repurchase Agreements and repurchase-to-maturity transactions U.S. Treasury federal agencies $ 34,191 $ — $ — $ — $ 34,191 U.S. government agency mortgage-backed securities 55,721 — — — 55,721 Private labeled mortgage-backed pools $ — $ — $ — $ — $ — Total Repurchase Agreements $ 89,912 $ — $ — $ — $ 89,912 Repurchase Agreements subject to offsetting arrangements — Securities sold under agreements to repurchase are secured by securities with a carrying amount of $ 90.1 million and $ 96.8 million at September 30, 2025 and December 31, 2024, respectively. Note 8 – Subordinated Notes On June 24, 2020, Horizon issued $ 60.0 million in aggregate principal amount of 5.625 % fixed–to–floating rate subordinated notes (the “ 2030 Notes”). The Notes mature on July 01, 2030 (the “Maturity Date”). The 2030 Notes had a fixed interest rate of 5.625 % per annum until July 1, 2025 and a floating rate per annum equal to the Three–Month Term SOFR, plus 549 basis points, thereafter until the Maturity Date, with the floating rate interest payment period commencing on October 1, 2025. As of July 1, 2025, the floating rate was 9.781 %. During the third quarter of 2025, Horizon provided a notice of redemption to the holders of the 2030 Notes that Horizon would be redeeming the 2030 Notes, in full, on October 1, 2025. Horizon redeemed the 2030 Notes, in full, on October 1, 2025 by using the net proceeds from the sale of the 2035 Notes, as described below and in Note 15 – Subsequent Events. On August 29, 2025, Horizon completed the offering and sale of $ 100.0 million in aggregate principal amount of its 7.000 % 38 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Fixed-to-Floating Rate Subordinated Notes due 2035 (the “2035 Notes,” and collectively with the 2030 Notes, the “Notes”). The 2035 Notes were issued by Horizon at a price equal to 100 % of their face amount. Horizon used the net proceeds from the offering for general corporate purposes, including in support of the potential repositioning of its balance sheet, and to redeem approximately $ 56.5 million in aggregate principal amount of the 2030 Notes, which was completed on October 1, 2025 (See Note 15 - Subsequent Events). The 2035 Notes will initially bear interest at a fixed interest rate of 7.000 % per annum until September 15, 2030, after which time the interest rate will reset quarterly to a floating rate equal to a benchmark rate, which is expected to be the then current three-month term Secured Overnight Financing Rate (SOFR) plus 360 basis points until the 2035 Notes' maturity on September 15, 2035. The Notes are redeemable by Horizon, in whole or in part, on any interest payment date on or after September 15, 2030, and at any time upon the occurrence of certain events, subject to the receipt of the approval of the Board of Governors of the Federal Reserve System to the extent then required under applicable laws or regulations, including capital regulations. The 2035 Notes are intended to qualify as Tier 2 capital of the Company for regulatory capital purposes. On December 8, 2023, Horizon cancelled $ 3.5 million of the $ 60.0 million in 2030 Notes at a price of 89.5 recording a gain of $ 368,000 . The total balance, net of unamortized issuance costs, of the Notes was $ 154.0 million and $ 55.7 million at September 30, 2025 and December 31, 2024, respectively. Total unamortized debt issuance costs were $ 2.5 million and $ 0.8 million at September 30, 2025 and December 31, 2024, respectively. Note 9 – Derivative Financial Instruments Our hedging policy allows the use of interest rate derivative instruments to manage our exposure to interest rate risk of specified assets and liabilities. All derivative instruments are carried on the balance sheet at their estimated fair value and are recorded in other assets or other liabilities, as appropriate, and in the net change in each of these financial statement line items in the accompanying consolidated statement of cash flows. Fair Value Hedges Fair value hedges are used to manage interest rate risk related to the underlying hedged items. The Company utilizes fair value hedges and applies the portfolio layer method to hedge stated amounts within a closed portfolio of certain available-for-sale mortgage-backed debt securities. As of September 30, 2025, and December 31, 2024, the amortized cost of closed portfolios of AFS debt securities using the portfolio layer method was $ 124.1 million and $ 0 million , respectively. To mitigate the impact of interest rate fluctuations on fair value, the Company previously entered into interest rate swap agreements on individual loans, converting the fixed rate loans to a variable rate. The Company also previously utilized fair value hedges to hedge investment securities, converting the fixed rate security to a variable rate. During the year ended December 31, 2024, the Company terminated the fair value hedges on loans and securities, recording a deferred gain of $ 2.3 million on the loan termination that will be accreted into interest income over the remaining life of the underlying loans, and a mark-to-market adjustment of $ 0.3 million that was recorded in non-interest income upon termination of the fair value hedges on investment securities. Changes to fair-value hedges on loans and the related loans are recorded as gains or losses in non–interest income. Changes to fair value hedges on mortgage-backed securities are recorded in interest income. The fair value hedges are considered highly effective. Other Derivative Instruments From time to time, the Company may enter into interest rate swaps that are not designated as hedging instruments. These derivative contracts typically involve transactions in which the Company enters into an interest rate swap with a customer while simultaneously executing an offsetting interest rate swap with a third-party financial institution. Under these arrangements, the Company agrees to pay interest to the customer on a notional amount at a variable rate and receives interest from the customer at a fixed rate. Concurrently, the Company pays the same fixed rate to the third-party financial institution and receives the same variable rate on the same notional amount. These interest rate derivative contracts allow our customers to effectively convert variable rate loans to fixed rate loans. 39 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The Company also enters into non–hedging derivatives in the form of mortgage loan forward sale commitments with investors and commitments to originate mortgage loans as part of its mortgage banking operations. As of September 30, 2025, these derivatives are recorded at fair value and are not expected to have a significant impact on the Company's net income over the next 12 months. Changes in fair value of both the forward sale commitments and commitments to originate mortgage loans were recorded and the net gains or losses included in the Company’s gain on sale of loans. The following tables summarize the fair value of our derivative financial instruments utilized by Horizon on a gross basis for the periods indicated. Asset Derivatives Liability Derivatives September 30, 2025 September 30, 2025 Notional Amount Fair Value Notional Amount Fair Value Derivatives designated as hedging instruments Interest rate contracts – fair value hedges $ — $ — $ 124,093 $ 530 Total derivatives designated as hedging instruments — — 124,093 530 Derivatives not designated as hedging instruments Interest rate contracts -customer accommodation $ 462,008 $ 13,973 $ 462,008 $ 13,973 Mortgage loan contracts — — 21,246 18 Commitments to originate mortgage loans 10,992 314 — — Total derivatives not designated as hedging instruments 473,000 14,287 483,254 13,991 Total derivatives subject to enforceable master netting arrangements, gross $ 473,000 $ 14,287 $ 483,254 $ 13,991 Less: Gross amounts offset — — — — Total derivatives subject to enforceable master netting arrangements, net $ 473,000 $ 14,287 $ 483,254 $ 13,991 Asset Derivatives Liability Derivatives December 31, 2024 December 31, 2024 Notional Amount Fair Value Notional Amount Fair Value Derivatives not designated as hedging instruments Interest rate contracts - customer accommodation $ 521,520 $ 28,817 $ 521,520 $ 28,817 Mortgage loan contracts 6,155 27 — — Commitments to originate mortgage loans 6,856 202 — — Total derivatives not designated as hedging instruments 534,531 29,046 521,520 28,817 Total derivatives subject to enforceable master netting arrangements, gross $ 534,531 $ 29,046 $ 521,520 $ 28,817 Less: Gross amounts offset — — — — Total derivatives subject to enforceable master netting arrangements, net $ 534,531 $ 29,046 $ 521,520 $ 28,817 While the Company is party to master netting arrangements with most of its swap derivative counterparties, the Company has elected to not offset derivative assets and liabilities under these agreements on its consolidated balance sheets. 40 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Collateral exchanged between the Company and dealer bank counterparties is generally subject to thresholds and transfer minimums and usually consists of marketable securities. At September 30, 2025, the Company pledged marketable securities as collateral with a carrying value of $ 27.7 million . The effect of the derivative and the hedged item in fair value hedging relationships on the condensed consolidated statements of income for three and nine month periods ended September 30, 2025 and September 30, 2024 is as follows: Location of gain (loss) recognized on derivative and Hedge item Amount of Gain (Loss) Recognized on Derivative and Hedged Item Three Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Derivatives designated as hedging instruments Interest rate contracts - fair value hedge Interest income - loans receivable $ — $ 317 $ — $ 982 Hedged item — ( 317 ) — ( 982 ) Interest rate contracts - fair value hedge Interest income - investment securities 18 — 18 — Hedged item 72 — 72 — Total $ 90 $ — $ 90 $ — The effect of derivatives not designated as hedging instruments on the condensed consolidated statements of income for the three and nine month periods ended September 30, 2025 and September 30, 2024 is as follows: Location of gain (loss) recognized on derivative Amount of Gain (Loss) Recognized on Derivative Three Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Derivative not designated as hedging relationship Mortgage loan contracts Non-interest income-Gain on sale of loans $ ( 331 ) $ ( 24 ) $ 112 $ 34 Commitments to originate mortgage loans Non-interest income-Gain on sale of loans 101 378 ( 45 ) 181 Total $ ( 230 ) $ 354 $ 67 $ 215 The following tables summarize the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships. Amortized Cost of Hedged Items Cumulative Hedge Accounting Basis Adjustments September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024 Available-for-Sale Debt Securities $ 125,367 $ — $ 530 $ — 41 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Note 10 – Disclosures about Fair Value of Assets and Liabilities The Fair Value Measurements topic of the FASB ASC defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. There are three levels of inputs that may be used to measure fair value: Level 1 – Quoted prices in active markets for identical assets or liabilities Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying condensed consolidated financial statements, as well as the general classification of such instruments pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended September 30, 2025. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Available for sale securities When quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include U.S. Treasury and federal agency securities, state and municipal securities, U.S. government agency mortgage-backed securities, corporate notes. Level 2 securities are valued by a third party pricing service commonly used in the banking industry utilizing observable inputs. Observable inputs include dealer quotes, market spreads, cash flow analysis, the U.S. Treasury yield curve, trade execution data, market consensus prepayment spreads and available credit information and the bond’s terms and conditions. The pricing provider utilizes evaluated pricing models that vary based on asset class. These models incorporate available market information including quoted prices of securities with similar characteristics and, because many fixed–income securities do not trade on a daily basis, apply available information through processes such as benchmark curves, benchmarking of like securities, sector grouping, and matrix pricing. In addition, model processes, such as an option adjusted spread model, is used to develop prepayment and interest rate scenarios for securities with prepayment features. Level 3 securities use the discounted cash flow model or other market indicators to calculate the fair values. Equity securities The fair value of the Company's equity investments is estimated by a third party utilizing readily determinable fair values quoted on an active market. Interest rate swap agreements The fair value of the Company’s interest rate swap agreements is estimated by a third party using inputs that are primarily unobservable including a yield curve, adjusted for liquidity and credit risk, contracted terms and discounted cash flow analysis, and therefore, are classified within Level 2 of the valuation hierarchy. Commitments to originate mortgage loans and mortgage loan contract assets/liabilities The Company’s forward commitments are valued based on quoted prices for similar assets in an active market with inputs that are observable. 42 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following table presents the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated financial statements measured at fair value on a recurring basis and the level within the FASB ASC fair value hierarchy in which the fair value measurements fall at the following: September 30, 2025 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Available for sale securities U.S. Treasury and federal agencies $ 31,836 $ — $ 31,836 $ — State and municipal 315,328 — 315,328 — U.S. government agency mortgage-backed securities 493,902 — 493,902 — Corporate notes 42,176 — 39,098 3,078 Total available for sale securities 883,242 — 880,164 3,078 Equity securities 496 496 — — Held for trading securities 598 — 598 — Interest rate swap agreements asset 13,973 — 13,973 — Commitments to originate mortgage loans 314 — 314 — Liabilities: Mortgage loans contracts ( 18 ) — ( 18 ) — Interest rate swap agreements liability ( 14,503 ) — ( 14,503 ) — December 31, 2024 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Available for sale securities U.S. Treasury and federal agencies $ 1,801 $ — $ 1,801 $ — State and municipal 201,834 — 201,834 — U.S. government agency mortgage-backed securities 14,543 — 14,543 — Corporate notes 15,499 — 15,499 — Total available for sale securities 233,677 — 233,677 — Equity securities 595 595 — — Interest rate swap agreements asset 28,817 — 28,817 — Commitments to originate mortgage loans 202 — 202 — Mortgage loan contracts 27 — 27 — Liabilities: Interest rate swap agreements liability ( 28,817 ) — ( 28,817 ) — 43 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) 44 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Certain other assets are measured at fair value on a non-recurring basis in the ordinary course of business and are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment): Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) September 30, 2025 Collateral dependent loans $ 10,842 $ — $ — $ 10,842 December 31, 2024 Collateral dependent loans $ 3,797 $ — $ — $ 3,797 Collateral Dependent Loans: For loans identified as collateral dependent, the fair value method of measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. Loans Transferred to Held for Sale: Once a decision has been made to sell loans not previously classified as held for sale, these loans are transferred into the held for sale category and carried at the lower of cost or fair value, less estimated costs to sell. At the time of transfer into held for sale classification, any amount by which cost exceeds fair value is accounted for as a valuation allowance. This activity generally pertains to loans with observable inputs, and therefore, are classified within Level 2 of the fair value hierarchy. However, should these loans include adjustments for changes in loan characteristics based on unobservable inputs, the loans would then be classified within Level 3 of the fair value hierarchy. As of September 30, 2025 and December 31, 2024, there were zero and $ 64.8 million loans transferred to held for sale on the accompanying Condensed Consolidated Balance Sheets, respectively. The following table presents qualitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements. September 30, 2025 Fair Value Valuation Technique Unobservable Inputs Range (Weighted Average) Collateral dependent loans $ 10,842 Collateral based measurement Discount to reflect current market conditions and ultimate collectability 34.2 %- 40.7 % ( 36.3 %) December 31, 2024 Fair Value Valuation Technique Unobservable Inputs Range (Weighted Average) Collateral dependent loans $ 3,797 Collateral based measurement Discount to reflect current market conditions and ultimate collectability 16.1 %- 40.1 %( 36.6 %) Note 11 – Fair Value of Financial Instruments The estimated fair value amounts of the Company’s financial instruments were determined using available market information, current pricing information applicable to Horizon and various valuation methodologies. Where market quotations were not available, considerable management judgment was involved in the determination of estimated fair values. Therefore, the estimated fair value of financial instruments shown below may not be representative of the amounts at which they could be exchanged in a current or future transaction. Due to the inherent uncertainties of expected cash flows of financial instruments, the use of alternate valuation assumptions and methods could have a significant effect on the estimated fair value amounts. 45 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following table does not include certain financial instruments that are recorded at fair value on a recurring basis, including some non-recurring financial instruments. See Note 10 for more details. The estimated fair values of financial instruments, as shown below, are not intended to reflect the estimated liquidation or market value of Horizon taken as a whole. The disclosed fair value estimates are limited to Horizon’s significant financial instruments at September 30, 2025 and December 31, 2024. These include financial instruments recognized as assets and liabilities on the condensed consolidated balance sheets as well as certain off–balance sheet financial instruments. The estimated fair values shown below do not include any valuation of assets and liabilities, which are not financial instruments as defined by the FASB ASC fair value hierarchy. The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Cash and Cash Equivalents – Cash and cash equivalents are composed of: cash and due from banks, interest bearing deposits in banks, and federal funds sold. The carrying amounts approximate fair value. Interest-Earning Time Deposits – The carrying amounts approximate fair value. Held–to–Maturity Securities – For debt securities held to maturity, fair values are based on quoted market prices or dealer quotes. For those securities where a quoted market price is not available, carrying amount is a reasonable estimate of fair value based upon comparison with similar securities. Loans Held for Sale – For mortgage loans, the fair value is derived from third party pricing models, based on active quotes. For non-mortgage loans, the assets are carried at the lower of cost or fair value. Net Loans – The fair value of net loans are estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors. FHLB Stock – Fair value of FHLB stock is based on the price at which it may be resold to the FHLB. Interest Payable – The carrying amounts approximate fair value. Deposits – The fair value of demand deposits, savings accounts, interest bearing checking accounts and money market deposits is the amount payable on demand at the reporting date and are classified within Level 1. The fair value of fixed maturity certificates of deposit is estimated by discounting the future cash flows using rates currently offered for deposits of similar remaining maturity and are classified within Level 2. Borrowings – Rates currently available to Horizon for debt with similar terms and remaining maturities are used to estimate fair values of existing borrowings. Subordinated Notes – The fair value of subordinated notes is based on discounted cash flows based on current borrowing rates for similar types of instruments. Junior Subordinated Debentures to Capital Trusts – Rates currently available for debentures with similar terms and remaining maturities are used to estimate fair values of existing debentures. 46 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following tables present estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall. September 30, 2025 Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Cash and due from banks $ 76,395 $ 76,395 $ — $ — Interest- bearing deposits in banks 381,860 381,860 — — Federal funds sold — — — — Cash and cash equivalents 458,255 458,255 — — Loans held for sale 1,921 — — 1,921 Loans, net 4,773,491 — — 4,630,621 Stock in FHLB 45,713 — 45,713 — Liabilities Non-interest bearing deposits $ 1,122,888 $ 1,122,888 $ — $ — Interest bearing deposits 4,398,013 3,198,332 1,197,211 — Borrowings 247,172 — 246,978 — Subordinated notes 154,011 — 154,981 — Junior subordinated debentures issued to capital trusts 57,636 — 52,155 — Interest payable 12,395 — 12,395 — 47 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) December 31, 2024 Carrying Amount Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Cash and due from banks $ 92,300 $ 92,300 $ — $ — Interest-earning deposits 201,131 201,131 — — Federal funds sold — — — — Cash and cash equivalents 293,431 293,431 — — Interest earnings time deposits 735 — 735 — Investment securities, held to maturity 1,867,690 — 1,566,268 — Loans held for sale 67,597 — 64,824 2,773 Loans (excluding loan level hedges), net 4,795,060 — — 4,611,702 Stock in FHLB 53,826 — 53,826 — Liabilities Non-interest bearing deposits $ 1,064,818 $ 1,064,818 $ — $ — Interest bearing deposits 4,535,834 3,446,680 1,084,986 — Borrowings 1,232,252 — 1,230,860 — Subordinated notes 55,738 — 55,284 — Junior subordinated debentures issued to capital trusts 57,477 — 48,559 — Interest payable 11,137 — 11,137 — Note 12 – Stockholders' Equity The components of accumulated other comprehensive loss, net of tax included in capital are as follows: Accumulated Other Comprehensive Income (Loss) September 30, 2025 December 31, 2024 Unrealized gain (loss) on securities available for sale $ ( 33,726 ) $ ( 38,193 ) Unamortized gain (loss) on securities held to maturity, previously transferred from AFS — 1,892 Unrealized loss on derivative instruments ( 549 ) — Total accumulated other comprehensive income (loss) $ ( 34,275 ) $ ( 36,301 ) On August 22, 2025, the Company closed a public offering of 7,138,050 shares of its common stock, at a price to the public of $ 14.50 per share, which included 931,050 shares of the Company’s common stock granted pursuant to the underwriters’ option to purchase additional shares at the public offering price, less underwriting discounts. This offering generated net proceeds of approximately $ 98.0 million after deducting the underwriting discounts and commissions and offering expenses payable by the Company. Note 13 – Regulatory Capital Horizon and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. These capital requirements implement changes arising from the Dodd–Frank Wall Street Reform and Consumer Protection Act and the U.S. Basel Committee on Banking Supervision’s capital framework (known as “Basel III”). Failure to meet the 48 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) minimum regulatory capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators, which if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective actions, the Company and Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities, and certain off–balance–sheet items as calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. The Company and Bank are subject to minimum regulatory capital requirements as defined and calculated in accordance with the Basel III–based regulations. As allowed under Basel III rules, the Company made the decision to opt–out of including accumulated other comprehensive income in regulatory capital. The minimum regulatory capital requirements are set forth in the table below. In addition, to be categorized as well capitalized, the Company and Bank must maintain Total risk–based, Tier I risk–based, common equity Tier I risk–based and Tier I leverage ratios as set forth in the table below. As of September 30, 2025 and December 31, 2024, the Company and Bank met all capital adequacy requirements to be considered well capitalized. There have been no conditions or events since the end of the third quarter of 2025 that management believes have changed the Bank’s classification as well capitalized. There is no threshold for well capitalized status for bank holding companies. 49 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) The following table presents Horizon and the Bank’s actual and required capital ratios as of September 30, 2025 and December 31, 2024, as well as the revisions to Horizon's regulatory capital ratios to reflect the correction of the capital computations for the foregoing periods: Actual Required for Capital Adequacy Purposes (1) Required For Capital Adequacy Purposes with Capital Buffer (1) Well Capitalized Under Prompt Corrective Action Provisions (1) Amount Ratio Amount Ratio Amount Ratio Amount Ratio September 30, 2025 Total capital (to risk-weighted assets) (1) Consolidated $ 785,080 15.00 % $ 418,661 8.00 % $ 549,492 10.50 % N/A N/A Bank 664,754 12.75 417,237 8.00 547,624 10.50 $ 521,546 10.00 % Tier 1 capital (1) (to risk-weighted assets) Consolidated 589,789 11.27 313,995 6.00 444,827 8.50 N/A N/A Bank 612,305 11.74 312,928 6.00 443,314 8.50 417,237 8.00 Common equity tier 1 capital (1) (to risk-weighted assets) Consolidated 532,153 10.17 235,497 4.50 366,328 7.00 N/A N/A Bank 612,305 11.74 234,696 4.50 365,082 7.00 339,005 6.50 Tier 1 capital (to average assets) (1) Consolidated 589,789 8.22 286,859 4.00 286,859 4.00 N/A N/A Bank 612,305 8.55 286,332 4.00 286,332 4.00 357,915 5.00 (1) As defined by regulatory agencies Actual Required for Capital Adequacy Purposes (1) Required For Capital Adequacy Purposes with Capital Buffer (1) Well Capitalized Under Prompt Corrective Action Provisions (1) Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 31, 2024 Total capital (to risk-weighted assets) (1) Consolidated $ 800,209 13.91 % $ 460,266 8.00 % $ 604,099 10.50 % N/A N/A Bank 725,383 12.64 % 459,039 8.00 % 602,489 10.50 % 573,799 10.00 % Tier 1 capital (1) (to risk-weighted assets) Consolidated 690,183 12.00 % 345,199 6.00 % 489,033 8.50 % N/A N/A Bank 671,095 11.70 % 344,279 6.00 % 487,729 8.50 % 459,039 8.00 % Common equity tier 1 capital (1) (to risk-weighted assets) Consolidated 632,760 11.11 % 258,900 4.50 % 402,733 7.00 % N/A N/A Bank 671,095 11.70 % 258,209 4.50 % 401,659 7.00 % 372,969 6.50 % Tier 1 capital (to average assets) (1) Consolidated 690,183 8.88 % 310,825 4.00 % 310,825 4.00 % N/A N/A Bank 671,095 8.64 % 310,539 4.00 % 310,539 4.00 % 388,174 5.00 % (1) As defined by regulatory agencies 50 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Data) Note 14 – Off-Balance Sheet Arrangements, Commitments, and Contingencies In the normal course of business, the Company is a party to financial instruments with off-balance sheet risk to meet the financing needs of its clients. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of amounts recorded in the consolidated balance sheets. Commitments to extend credit are legally binding agreements to lend to a client, so long as there is no violation of any condition established in the commitment contract. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a client to a third party. The credit risk involved in issuing letters of credit is essentially the same as the credit risk involved in extending loan facilities to clients. The Company’s policy for obtaining collateral, and determining the nature of such collateral, is essentially the same as in the Company’s policies for making commitments to extend credit. The methodology for estimating the liability for unfunded loan commitments is consistent with the allowance for credit losses on loans. The following table represents the commitments to extend credit and standby letters of credit as of September 30, 2025 and December 31, 2024 , respectively: September 30, 2025 December 31, 2024 Commitments to extend credit $ 1,165,657 $ 1,018,302 Standby letters of credit 21,699 23,457 Total $ 1,187,356 $ 1,041,759 Note 15 - Subsequent Events On October 01, 2025 (the “Redemption Date”), Horizon redeemed the entire $ 56.5 million aggregate outstanding principal amount of the 2030 Notes. The 2030 Notes were redeemed pursuant to the terms of that certain Indenture, dated as of June 24, 2020, between Horizon and Wilmington Trust, National Association, as trustee, and the First Supplemental Indenture thereto dated as of June 24, 2020, at a redemption price equal to 100 % of the aggregate principal amount of the 2030 Notes, plus accrued and unpaid interest thereon to, but excluding, the Redemption Date (the “Redemption Price”). As provided in the notice of redemption, dated August 29, 2025, previously provided to the holders of the 2030 Notes, each such holder is entitled to receive the Redemption Price upon surrender of the 2030 Notes to the Trustee. To complete the redemption, Horizon used the net proceeds from the issuance of the 2035 Notes that closed on August 29, 2025. 51 Table of Contents HORIZON BANCORP, INC. AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition And Results of Operations For the Three and Nine months ended September 30, 2025 and 2024